You get what you pay for: Valerie Wagoner | Mint
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Business News/ Specials / Lessons In Entrepreneurship/  You get what you pay for: Valerie Wagoner

You get what you pay for: Valerie Wagoner

The wrong hire is extremely costly for an organization

Valerie Wagoner. (Valerie Wagoner.)Premium
Valerie Wagoner.
(Valerie Wagoner.)

If you were buying clothes for your baby or taking your girlfriend out on a date, would you seek out the cheapest possible option? No way. You want the best for those you care about. Then, why would you do that for the company you love?

As an entrepreneur, never forget that you get what you pay for. Cheap most often leads to cheap quality that must be replaced. Replacing and restarting is extremely costly because not only are you paying for something twice, but also because you lose momentum, and that is the biggest cost of all. Hopefully, you can learn from my past mistakes and always focus on the value in value for money.


The wrong hiring is extremely costly for an organization. When screening candidates, if you have any doubt, do not hire. Luckily at ZipDial Mobile Solutions Pvt. Ltd, we have avoided this mistake and we are deeply proud of everyone on the team.

However, we did not always correctly apply the logic of you get what you pay for in the early days when we tried to be cost-effective about hiring sales people. We had two folks on board at a very low salary but very high commission model. This rarely works and never works when you are trying to sell an innovative product. You need someone to evangelize for you when you are trying to establish yourself, and this is a full-time and, sometimes, thankless effort. Inevitably, someone working only on commission or part-time will not create the value you need, and the structure is not set up to make anyone successful. We learned from this quickly and have not attempted any part-time employees since.


As an entrepreneur, you have 10 million things to think about, and the last of those any of us want to spend time on is bureaucratic compliance work. We need to spend our time building product and generating revenue. Being younger organizations who are not yet big enough to have large accounting and legal teams, we outsource these functions to company secretary and accounting firms.

Do not take this for granted. I repeat, do not take this for granted.

At ZipDial, we have unfortunately gone through three accountants and two company secretaries before finally finding the right people (who came at a slightly higher cost). Churning from one to the other was an unanticipated cost and big waste of time. We should have aimed for higher quality from the beginning.

Your space

This is an area where ZipDial has done well. The entire team loves our office with its big windows, beanbag chairs and table tennis on the terrace. Luckily, thanks to my colleagues, we found a fantastic space for an unusually reasonable price. We are so happy working in the office that I would much rather spend time there than at home which certainly pays off in productivity.

I have seen the bad effects of companies being stingy about such things in a variety of ways. Depressing office space may be cheaper but it leads to lower morale. I’ve seen offices skimp on hygiene and cleaning supplies, leading to employees spreading sickness much faster. Companies who don’t support adequate transportation budgets and force employees to travel in only second-class trains in the Mumbai heat risk a salesperson showing up to a client late and sweating, certainly not helping their first impression or their ability to close a sale. I certainly recommend being frugal as a start-up and not draining funds on expensive rent, furniture or hired cars, but do what’s right for the long-term productivity and health of the company.

Remember that being pound wise and penny foolish is just that—foolish. Think long term about all of the investments you make in your business.

Valerie R. Wagoner is founder and CEO, ZipDial.

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Published: 19 Feb 2013, 01:31 AM IST
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